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Comment by pkaye | Hacker News Reader

Actually this how many successful people do it. It is better to break the rules and profit from it and if caught, pay a small fine and keep your ill gotten gains. I've learned this long time ago (watching coworkers, family, etc) but will probably never do it myself because I'm just not that kind of person.

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I think there is a stage where a genuine innovation is in a regulatory grey state because society simply hasn't processed its effects yet. That wasn't the case here... but it is in many other situations. Sometimes ex-post-facto the innovation is ruled against regulation and sometimes not.

Take Tesla as an example -- a company who has tried to sell cars online. Since many states hadn't seen that before, they tried to rule that it was illegal due to dealer-sales regulation. Do you fault Musk for hacking this (bad) regulation by trying to work around it? Is he not proving its spuriousness by innovating in this manner?

In some cases its considered hero's work, and in other's villainous greed.

Since many states hadn't seen that before, they tried to rule that it was illegal due to dealer-sales regulation.

I don't see what being online has anything to do with it; the spirit of the rule - preventing the manufacturers from competing with dealerships - is valid anyway. I personally disagree with this rule, but the "online" part is just Tesla trying to get off on a technicality.

I'm all for manufacturers being prevented from going back on the deals they struck with dealers; the capital they raised from selling dealership franchises was very important for the growth of the manufacturers.

But if a manufacturer never setup a dealer program? Fair game to them, IMO.

It's one step more complicated than that. GM has 5 year renewable franchises, so theoretically they could just wait 5 years and not renew.

The issue is that many states have laws preventing OEMs from selling directly.

There are similar laws for unions.

I feel the laws preventing OEMS selling directly are antiquated. Dealerships are a scam. It's a game of "how much can i squeeze out of the other party" - which generally is bad for consumers. Since most aren't trained to take advantage. OEM's don't need to sell directly, but allowing a "store" model where prices are fixed, non negotiable would likely be best for everyone in the long run. Well, except for the dealers. But at least there would be predictability. Dealers shouldn't be a protected party - the consumer should be.

The laws are intended to protect the consumer by making sure there are physical places that can repair your car in the state. The question is whether that's necessary any more.

The laws are intended to protect the consumer by making sure there are physical places that can repair your car in the state.

A law that forced OEMs who wanted to sell directly to have repair shops in the region would have that intention. In this case, it's pure window dressing.

Yes, but that has nothing to do with dealerships as a POS location. Tesla should be able to have a store, and be regulated to make sure it provides service locations for vehicles.

Sure, if you answer the first question with "yes there needs to be physical service points in the state". I believe some people think this is unnecessary altogether though, so they argue for scrapping the entire law instead of changing it to allow for new ways of meeting the same goal.

> I don't see what being online has anything to do with it

States regulate auto manufacturers from competing with their dealerships; Tesla selling online would be a federal issue (interstate commerce).

Ergo, Tesla gets around bad regulatory capture by using a law that supersedes state law.

Being a federal issue doesn't preclude it being a state issue as well, as far as I know.

Interstate commerce being a federal power under the Constitution prohibits states acting to regulate interstate commerce where the federal government has acted, without the permission of Congress, and prohibits the States from discriminating against out-of-state commerce generally. That doesn't mean that all State regulation of interstate commerce is prohibited, but the State's power is sharply circumscribed by the mere designation of the federal power as well as by federal action exercising that power.

Are you making a general point, or is this particular rule affected by such restrictions?

AFAIK, Tesla's argument in the cases over the direct-sales rule has been that the particular rule is a violation of the Commerce Clause at least as applied against Tesla's online sales, though I don't think any federal court has yet ruled on the specific issue.

I believe Tesla wants to handle this at the federal level, to negate the state's restrictions all in one go.

> In some cases its considered hero's work, and in other's villainous greed.

Or both simultaneously, sometimes even by the same people!

> there is a stage where a genuine innovation is in a regulatory grey state because society simply hasn't processed its effects yet. That wasn't the case here

Since you explicitly mention "grey state," it appears you recognize the subjective nature of both law and morality.

AirBnB, PayPal & Uber are better examples. The "follow the rules period crowd" would never have let them succeed. Is that really what we want?

Why PayPal?

For starters, acting like a bank.

With exception of PayPal, of which I know nothing that would explain them being included in this list, I'd say yes - that's exactly what we want. AirBnB and Uber are burning social trust to make money, they're literally poisoning the society. And to (literally!) add insult to injury, Uber management are also being assholes about the whole process.

It seems like your "poisoning the society" claim is highly subjective, based on how you perceive their actions and what you think is the the "ideal" society.

For me, and presumably a bunch of other people, AirBnB and Uber provide really services far superior to their predecessors.

It's probably a case of adding insult to injury. Looking at AirBnB specifically, their most vocal opponents seem to be cities who already have too few apartments left to rent. When a sizable portion of the remaining few apartments is then put on AirBnB rather then rented, rent prices go even higher than they already were.

At least, this is what happened in Berlin (and AFAIR also some other large German cities), which is why Berlin is looking into banning AirBnB (by requiring special permits for vacation homes). Source e.g. http://www.spiegel.de/reise/aktuell/bussgelder-ab-mai-berlin...

So, it may not be AirBnB's fault primarily. They're just making bad situations even worse.

Yep, and there is no incentive to create new homes. Except for airbnb.

Why would you create a new home when you just can increase the rent?

Usually there is a monetary incentive for developers to build new homes.

I don't think it's that highly a subjective viewpoint, if you don't ignore the social aspects of their business altogether. I do agree that the level of service of Uber (and probably AirBnB) is superior; I may also agree that a lot of regulations they're working around should be revisited.

But the idea that when you don't like a law, you're free to ignore it is not something acceptable in a civilized society. There are ways and means to affect the legal situation (and numerous companies in Europe managed to use them successfully when it comes to taxis - so much that on the old continent, Uber is not really an innovative service), but you have to play by the rules. Breaking them should - and usually does - result in you getting fined or imprisoned.

Uber is exploiting the high inertia of local government bodies; their strategy is to gain enough popularity fast enough that they can play the local population against lawmakers - not unlike a fast-spreading virus that overwhelms the host before their immune system can mount a defense.

What I don't want is to see this blatant, unilateral defiance against the law to spread. Today it's a taxi company with a silly app and a big marketing budget; tomorrow it will be the next hot e-commerce site that plays fast and loose with customer protection laws; the next week it will be a biotech startup that thinks biosafety regulations are optional and otherwise a nuisance.

I think it's mainly exploiting that the laws are kinda dumb and only perhaps made sense in an earlier age.

Next week, it will be lawmakers soliciting terrible advice from the electorate. When will this horror end?

I fundamentally disagree with your belief that disobeying bad laws is an undesirable way to get bad laws to change. I think it is a very valid way to change bad laws, and in many cases the only remotely viable way. Do you honestly believe there was a viable way to get taxi regulations changed other than the general approach taken by Uber and Lyft? Granted, some of Uber's reported specific actions are slimy even to me, but I am convinced that their general approach (ignore the regulations and hope that the population realizes the superiority of your service faster than the government can shut you down) is the only viable way to do it. I'm tempted to go so far as to call this approach downright progressive, although I realize many self-proclaimed progressives will find that attribution repulsive.

Europe had its own taxi revolution going on for more than a decade. From personal experience in my city, the companies trying to change the status quo did exploit loopholes they could find, but they did not went and blatantly disregarded the laws. Ultimately the case of taxis vs. "people transport" companies got solved in court, proper adjustments to the law were made, and everyone is happy. That's how things should be done in a civilized society.

The superiority of Uber's service over regular taxi is true (a bit smaller advantage over "people transport" companies we have in Europe, but Uber brought some "innovative" solutions to the continent too, like controlling taxi radio via Spotify...), but I absolutely disagree with the approach they take and even more I dislike the way this particular company behaves. There's also some blame to be put on the governments too, for not reacting quickly and decisively enough (kudos to Germany for doing it right) - there's little that can undermine the trust in the rule of law more than seeing people getting rich by ignoring the rules.

> But the idea that when you don't like a law, you're free to ignore it is not something acceptable in a civilized society.

Civil disobedience is very much a part of civilized society, your premise is flawed.

This particular case is not civil disobedience, it's a company getting rich off illegal activity.

As for civil disobedience itself - it may be necessary sometimes, but this should be something rare, not a business model.

When a company ignores what they consider bad laws, it most certainly is civil disobedience.

Even forgetting if the services are superior or whatever, is it all that crazy to be able to let people spend the night in your house or drive someone around for money?

This isn't. But people are using this to turn their apartments into cheap-ass hotels instead.

In what way are they burning trust? I wouldn't have trusted my AirBnB host if it weren't for AirBnB.

Now I say to other people "don't worry, AirBnB hosts won't harvest your organs or anything" and they may begin trusting AirBnB hosts (or hosts in general) more.

It's not about your trust in the service, it's about the trust that's present between various members of society. AirBnB is setting tenants against landlords (by encouraging former to do subletting, which leads latter to add terms to the agreements that otherwise wouldn't be needed), neighbours against neighbours (c.f. all the complains from people who'd like to be asked before having their apartment building turned into cheap-ass hotel) and people against cities (by encouraging violations of zoning laws).

Trust on a social level is something that keeps civilization together. It's what lets you do business and deal with people without constantly looking over your shoulder worrying that everyone is out there to fuck you over. AirBnB makes a lot of their money by eroding this trust.

> It is better to break the rules and profit from it and if caught

I think the point the OP was making is that it might be better for you to do so, it's unclear whether it is better for everyone else.

> Actually this how many successful people do it. It is better to break the rules and profit from it and if caught, pay a small fine and keep your ill gotten gains.

Heck, this isn't just a game plan for startups, it's standard operating procedure for big banks. The only real way to deter bad behavior is to send people to prison.

Which is why the fines should be relative to the amount of money made breaking the rules. As in, all of that money.

s/better/more profitable/

> break the rules and profit from it and if caught, pay a small fine and keep your ill gotten gains. I've learned this long time ago (watching coworkers, family, etc)

Sounds like family christmas was a hoot :)

every sillicon valley investor knows it, the very famous quote "break the rules and ask for forgiveness later" plenty doing it from Zenefits, to Uber and AirBnb...

And yet when Union Carbide does it, they're the bad guys.

They forgot the crucial first step: be cool

They're breaking civil regulations, not (proximately) killing people.

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